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Why do listing sites have “sponsorship disclosures”?

The listing sites have a small banner above the sponsored listings, as Sponsored.

Do they need to have it legally?

If not, then why do they do it? Is there any research or argument about whether it helps the sales and/or helps in giving a better signal about the product to the user?

Answer 9359

Countries require you to disclose affiliations. In particular the US:

http://www.socialmediaexaminer.com/ftc-2013-disclosures/

http://www.internetlegalattorney.com/when-is-an-affiliate-disclosure-required/

More saliently, if you do not disclose your affiliations, your credibility stands to drop to zero if/when they’re discovered and turn out to be reason for concern. Angry users tend to generate a lot more noise and word of mouth than happy ones. So better play it safe and disclose.

You can do a few thought experiments if you need any convincing of the damage that lack of proper disclosure can do:

  1. Given two pieces of research arguing different sides of a coin (e.g. smoking is good/bad), you learn that a lobbyist commissioned the piece in their favor while trying to make it masquerade as independent research. Do you still give that piece as much (if any) credibility?
  2. On a newspaper website, you’re a few paragraphs into an article and realize you’re reading through salesy tripe that is masquerading as information. If the publication did not disclose upfront that the piece was sponsored and who the author is, will you still trust it to provide you with anything but more of the same?
  3. Consider a list on just about any topic. You learn that its author receives a commission on each item, and that there’s no affiliate program for items they’re explicitly not recommending. The list’s author disclosed none of this on their site; will you still trust it?

For research, honestly no idea off the top of my head. Intuitively, there is, and you’ll likely find it concluding that lying (i.e. no disclosure) works better until you get caught (and you will). Like any form of manipulation, subtle without being pushy works. In this case, so does being an outrageous troll. Once you get caught red handed, your credibility quickly drops to zero. And in today’s world there always will be someone with a grudge who will actively call you out online.

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